Is Liquidity Services, Inc. (NASDAQ:LQDT) a buy here? The smart money is in a bearish mood. The number of long hedge fund positions fell by 3 recently.
In the financial world, there are dozens of metrics shareholders can use to track their holdings. A duo of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite fund managers can outclass the market by a superb amount (see just how much).
Equally as integral, bullish insider trading sentiment is a second way to break down the stock market universe. Obviously, there are lots of motivations for an executive to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this tactic if shareholders understand where to look (learn more here).
Consequently, it’s important to take a gander at the latest action encompassing Liquidity Services, Inc. (NASDAQ:LQDT).
How have hedgies been trading Liquidity Services, Inc. (NASDAQ:LQDT)?
Heading into Q2, a total of 10 of the hedge funds we track were long in this stock, a change of -23% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably.
According to our comprehensive database, Diamond Hill Capital, managed by Ric Dillon, holds the most valuable position in Liquidity Services, Inc. (NASDAQ:LQDT). Diamond Hill Capital has a $10 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Cardinal Capital, managed by Amy Minella, which held a $9.4 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Jason F. Harris’s Kendall Square Capital, Douglas T. Granat’s Trigran Investments and Joel Greenblatt’s Gotham Asset Management.
Seeing as Liquidity Services, Inc. (NASDAQ:LQDT) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there were a few hedgies that decided to sell off their full holdings heading into Q2. Intriguingly, Lee Ainslie’s Maverick Capital sold off the biggest stake of the “upper crust” of funds we watch, valued at an estimated $104.2 million in stock.. Joseph A. Jolson’s fund, Harvest Capital Strategies, also dumped its stock, about $5.9 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 3 funds heading into Q2.
Insider trading activity in Liquidity Services, Inc. (NASDAQ:LQDT)
Bullish insider trading is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the last half-year time frame, Liquidity Services, Inc. (NASDAQ:LQDT) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
With the returns demonstrated by Insider Monkey’s studies, retail investors should always monitor hedge fund and insider trading activity, and Liquidity Services, Inc. (NASDAQ:LQDT) applies perfectly to this mantra.